(a) Stock A has an expected return of 18% and a standard deviation of 30%. Stock B has expected return of 12% and a standard deviation of 36%. The correlation between the two stocks is 0.25 if you form a portfolio where you put 40% of your money in A and 60% in B, what is the expected return and standard deviation for the portfolio?
(b) How will the excepted return and standard deviation change if the correlation between the two stocks is zero?
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